Zimbabwe is reviving gold coins to support its fighting currency as previous efforts with gold-backed digital tokens failed to curb economic instability.
Zimbabwe is once again relying on gold to turn the currencies it fought into gold as the country’s central bank, Zimbabwe Reserve Bank, revived the sale of physical gold coins just 10 months after it scrapped its program, betting that digital tokens could succeed where they struggled.
The so-called “Mosi-oa-tunya” coin, named after Victoria Falls, is being reintroduced while officials call it the “time of charm” of gold. Mint was suspended in July 2024 after Reserve Bank Governor John Mushayavanf suggested a shift to digital alternatives.
But now, officials seem to think differently. Persistence Gwanyanya, a member of the central bank’s monetary policy committee, told Bloomberg that the global gold price surge was the perfect moment for action.
“At this point, gold is more attractive to the market and supports our value-preserving efforts. We are taking advantage of solid gold prices to reinject gold coins into the market.”
Persistence Gwaniyaniya
According to Bloomberg, two major banks, the Central Africa Building Society and the Ned Bank Zimbabwe, have already confirmed that they are selling the new coins as “alternative investment options” and “alternative investment options.” Coins are available in sects with a 1/10 ounce to full ounce, offering flexibility for buyers who don’t want to pay a large amount of cash upfront.
Unrealized hope
Authorities certainly hope that the lasting appeal of physical gold will be successful if more experimental strategies (the country’s digital currency) decline.
Zimbabwe introduced a gold-supported digital token originally named Zig (Zimbabwe Gold) in April 2023 to stabilize its currency and provide equipment that maintains value amid ongoing inflation and currency instability.
Introducing Zimbabwe’s Goldback Digital Token (Zig) as a payment method pic.twitter.com/o1cl5dsbaq
– October 5, 2023, Zimbabwe Reserve Bank (@ReserveBankzim)
The token was later renamed GBDT (Gold Support Digital Token) and avoided confusion with the new official currency, also known as Zig, which was introduced in the second quarter of 2024. GBDT is stored in an E-Gold wallet or e-Gold card and can be traded with peer-to-peer and business transactions.
At first, the move seemed to generate enthusiasm. The central bank reportedly received 135 applications during its first round of sales, equivalent to $14 billion in Zimbabwean dollars (approximately $12 million).
However, signs of trouble quickly appeared. The ordinary Zimbabweans, still traumatized by memories of hyperinflation and economic collapse of the 2000s, were slow to embrace unfamiliar tokens. Many people remained vigilant about anything new and preferred to maintain their trust and savings in the US dollar. By June 2023, only 35 new applications in digital currency were reported.
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Despite intense official support, the local currency continued to slide. Bloomberg is down about 65% against more dollars this year in official markets, and even more on the streets, Bloomberg said.
Some external observers have warned from the start that digital tokens are not silver bullets. The International Monetary Fund was openly skeptical for one. It reportedly urged Zimbabwean government to liberalize exchange rates rather than experimenting with gold-backed digital currencies. The IMF also warned that there is a risk of draining valuable national assets in order to support alternative currencies using gold reserves.
Even the well-known token auctions were unable to alleviate these concerns. The first two sales were fully subscribed, but the long-term viability of gold-supported tokens remains uncertain, with authorities saying that only about a ton of gold reserves have been deployed to support digital currencies.
For comparison, Tether revealed that he bought nearly eight tons of gold in the first quarter of this year, endorsing the golden token Xaut.
The largest export
In contrast, physical gold coins may feel more secure. At least for now.
The revival comes as global bullion prices surged by around 25% this year, boiling down increasing economic uncertainty and tensions in global trade. Zimbabwe’s economy could use boost. Gold is one of the country’s largest exports, and revenue from freight reportedly rose sharply from $33.3 million the previous year.
Still, even officials seem to recognize that this is not guaranteed. Zimbabwe’s history with alternative finance schemes is long and often painful. After Hyperinflation made a valueless rendering, the local dollar itself was discarded in 2009, and then reintroduced with complicated results 10 years later.
In that sense, gold coins may feel like a safer bet, but they are also like throwbacks.
As countries like Nigeria experiment with central bank digital currencies like Enaila, Zimbabwe now appears to be back to old ideas, betting that physical assets will remain in position over tech-driven solutions.
Crypto.News contacted the Reserve Bank of Zimbabwe but did not receive a response at the time of publication.
read more: Zimbabwe introduces gold-backed currency to combat inflation
